The coronavirus outbreak poses a massive health risk, but it also may lead to the disruption of everyday life and business. With only about a month before April 15, will the virus cause havoc with filing taxes?
Time will tell if the virus hampers operations of tax authorities. Tax preparers say their readying for the virus combines common sense, waiting for official guidance and trying to maintain business as usual.
“We expect staff to stay home if they’re sick even though it’s tax time,” said CPA Mary Kay Foss in Walnut Creek, Calif., where the coronavirus recently appeared locally.
“We’re reviewing our disaster plan and updating it in case the coronavirus causes our firm or our clients to be quarantined—especially during tax season!” said Christopher M. Chudyk, CPA and partner at Traphagen CPAs & Wealth Management in Oradell, N.J.
Normal IRS operations are “continuing” and the agency foresees a “strong, smooth filing season for the nation. Taxpayers should continue to file and submit tax returns as they normally would,” the IRS said in a statement.
The Taxpayer Advocate Service, which helps taxpayers resolve disputes with the IRS, is reportedly working with leaders of the agency on the coronavirus regarding such issues as travel and teleworking. More details are due this week.
Kenneth Bagner, CPA and member in charge of the tax practice at SobelCo in Livingston, N.J., expects no disruption to the filing season if staff follows best health practices. “This is traditionally flu season, and we’ve always had to deal with some absenteeism during tax time,” he added.
Like most businesses, most tax-prep firms typically create and practice disaster plans. Depending on where the firm is, the plan can involve responses to weather, fire or terrorism, among other threats. “My normal disaster plan does not cover pandemics,” said Morris Armstrong, an enrolled agent and RIA at Armstrong Financial Strategies in Cheshire, Conn. “Keep clean, don’t see clients when they have colds and so on.”
“I’m certain it will slow things down with the IRS and state departments of revenue as it begins to hit the U.S. with more strength,” said Bruce Primeau, CPA and president at Summit Wealth Advocates in Prior Lake, Minn. He added that refunds will probably come slower this year.
The six-month extensions to file returns should be considered, “especially if this [virus] transmission goes rogue, as the government may provide some immediate filing relief for impacted persons,” said Daniel Morris, a CPA and senior partner at Morris + D’Angelo CPAs, in San Jose, Calif. “I think the government will provide some extensions.” It should be noted that an extension to file a federal return is not an extension of time to pay taxes due.
The IRS often does extend filing deadlines in official federal disaster areas, though not generally in situations where states have declared emergencies.